Parol Evidence Demonstrated What Appeared to Be a Contract Was Not—There Was No Meeting of the Minds Re: the Consideration for the Contract

The Third Department, over a dissent, reversing Supreme Court, determined extrinsic evidence should have been considered on the issue whether a contract was ever formed, i.e., whether there was a “meeting of the minds.” Based upon that extrinsic evidence, the breach of contract complaint was dismissed by the Third Department. The defendant argued that the contract was premised upon the understanding plaintiff would execute a power of attorney, which plaintiff refused to do. The parol evidence, emails, demonstrated that defendant agreed to the terms of the contract in return for the power of attorney executed by the plaintiff.  The power of attorney was the consideration for the contract. Therefore, the parol evidence demonstrated no contract was ever formed:

In order “‘[t]o create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms’ and consideration” … . Defendant is not arguing that a valid agreement between the parties included an unstated commitment by plaintiff to execute the power of attorney; instead, she is asserting that she proposed an agreement upon that understanding, but that there was never a meeting of the minds on the issue sufficient to give rise to a valid agreement. Accordingly, she was entitled to use parol evidence “to show that what appears to be a contractual obligation is, in fact, no obligation at all”… . Libasci v Singares, 2015 NY Slip Op 04357, 3rd Dept 5-21-15